Australia Homebuyers Less Confident as Economy Weakens, NAB Says

July 11 (Bloomberg) -- Australians are less optimistic
about a recovery in the nation’s housing market as a slowing
economy saps confidence, a National Australia Bank Ltd. survey
showed.

Home prices across the country are expected to rise by 1.4
percent in the 12 months to June 2014, compared with previous
expectations for an increase of 2.2 percent, the survey of about
300 real estate agents, developers, property owners and asset
managers showed. Rents will climb by 1.5 percent across the
country in the next year, down from an earlier forecast of 2.6
percent, according to the report.

House and apartment prices rose 0.2 percent in the three
months to June 30 in the nation’s state and territory capitals,
after climbing 2.8 percent in the first quarter, the RP Data-Rismark home value index showed. Consumer confidence in July was
little changed as the Reserve Bank of Australia’s record-low
2.75 percent benchmark rate had limited impact on an economy
transitioning from mining to other industries as resources
investment peaks.

“National house prices appear to have taken a backward
step in the second quarter,” Alan Oster, chief economist at
NAB, wrote in the report. “Longer-term confidence has also been
undermined by the softening economy and the downside risks being
posed by the economy’s structural adjustment.”

The NAB residential property index, based on the survey,
peaked in the first quarter of 2013 at 35 before slipping to 15
in the most recent period. It is forecast to climb to 29 by the
end of this year and to 60 by the second quarter of 2015,
according to NAB.